Pharos Energy plc announced that the Egyptian Cabinet has approved the Third Amendment of its El Fayum Concession Agreement.

“We are delighted that the El Fayum Third Amendment has been approved by the Egyptian Cabinet, which encourages investment into this Concession to increase production rates for the mutual benefits of Egypt and Pharos and our partners,” Pharos President and CEO Ed Story said.

According to the company’s press release, the enhancements within the Third Amendment aim at delivering a lower break-even price per barrel as well as improving earlier cash flow from the producing fields. To illustrate, the El Fayum Third Amendment agreement includes an increase of the cost recovery petroleum percentage and a three-and-a-half-year extension to the exploration license term.

The Cabinet approval is a key milestone in the process towards Parliamentary approval and Presidential ratification. Ratification of the El Fayum Third Amendment is one of the condition precedents to the farm-out of a 55% share of Pharos’ interest in the El Fayum Concession and the North Beni Suef Concession to IPR, as announced on 15 September 2021.